The Government Shutdown and What Dairy Should Know

Because of Congress’s inability to agree on a funding package for the federal government, normal government operations shut down on Wednesday. Based on information we gathered from several industry sources, here is how the government shutdown could affect dairy farmers and their cooperatives:

Disaster assistance payments. The USDA recently announced the launch of its Emergency Livestock Relief Program (ELRP) and 23 Pennsylvania counties that were pre-approved for relief funding. According to the National Milk Producers Federation (NMPF), these disaster assistance payments will be paused with the government shutdown. Application materials are still available on the website for now, and materials should be gathered to prepare for the original Oct. 31 application deadline.

Farm Service Agency (FSA), NRCS offices and loans. Most FSA staff will be furloughed, and county FSA offices will be closed. Should a shutdown

last longer than 10 days, one employee may become available per service center to complete urgent loan processing tasks for certain active loans. No new loans will be processed at any point during the shutdown. Most NRCS staff will be furloughed, and county NRCS offices will be closed. This will consequently stop payments and technical assistance on active contracts. Borrowers will still be expected to make loan payments on time.

USDA offices. According to the Daily Dairy Report, under USDA’s shutdown plan, nearly half of USDA’s employees working across 29 agencies will be furloughed, including a majority working at the Risk Management Agency (RMA), Foreign Agricultural Service (FAS), Economic Research Service (ERS), and National Agricultural Statistical Service (NASS).

Data reports. NASS and other agency reports, including the monthly Milk Production, Dairy Products, Cold Storage, and World Agricultural Supply and Demand Estimates will be halted. According to NMPF, USDA will continue to report pricing information, including the National Dairy Product Sales Report, and Market News information.

FMMO pricing delays. According to the Daily Dairy Report, while USDA’s plan did not immediately furlough most employees of the Agricultural Marketing Service (AMS), which administers Federal Milk Marketing Orders (FMMO), AMS was heavily impacted during the 2018-19 government shutdown. AMS employees collect monthly reports from milk handlers and dairy product pricing data and announce Class I, II, III, and IV milk prices and component prices, all used to calculate FMMO milk prices. While producers will receive timely milk payments, once information begins flowing, adjustments could be made to future checks.

Regulatory side of the industry. According to NMPF, state milk regulatory agencies have indicated that a federal shutdown will not affect the Grade A program. USDA Agricultural Marketing Service and the Animal and Plant Health Inspection Agency (APHIS) will continue issuing sanitary and veterinary certificates for export.

Disease response. According to NMPF, animal health emergency programs, including New World screwworm and Highly Pathogenic Avian Influenza (HPAI), will continue during the shutdown.

Are there any other anticipated shutdown effects? According to NMPF, “experience with government shutdowns shows that the effects of funding shortfalls and furloughed federal staff largely depend on whether the government declares certain programs to be essential services. Those areas, usually involving safety and security, such as food safety inspections required by law and cybersecurity operations, will continue to operate as usual. Programs deemed non-essential will be curtailed. A shutdown’s severity is also affected by its length, which currently is unknown.”